Introduction

Starting a business in India requires careful planning and legal compliance. The Private Limited Company (Pvt Ltd) is widely preferred by entrepreneurs, startups and growing businesses for benefits like limited liability, separate legal identity, perpetual succession and higher credibility with banks and investors.

This guide explains eligibility, documents, the SPICe+ incorporation process, post-incorporation compliances, taxation and practical tips to avoid common pitfalls.

1. What is a Private Limited Company?

A Private Limited Company is a privately held business entity governed by the Companies Act, 2013. Key legal features include restricted share transfer, limited membership (up to 200), separate legal personality and limited liability for members.

• Separate legal entity — distinct from shareholders & directors
• Limited liability — members’ liability limited to share capital
• Perpetual succession — continues despite membership changes
• Ownership-management separation — shareholders (owners) and directors (managers)

2. Advantages of Pvt Ltd Registration

• Limited liability protection — personal assets safeguarded
• Separate legal entity — company can own property and sue/be sued
• Perpetual succession — continuity despite changes
• Fundraising opportunities — preferred by VCs, banks and angels
• Enhanced credibility — trusted by clients, suppliers and lenders
• Tax benefits — Startup India schemes and corporate tax advantages in certain cases

3. Eligibility Criteria

1. Directors: Minimum 2 directors (at least 1 resident in India); up to 15 directors.
2. Shareholders: Minimum 2, maximum 200 members.
3. Share capital: No minimum paid-up capital requirement.
4. Registered office address: Mandatory (residential or commercial permitted).
5. Unique company name: Must not conflict with existing companies or trademarks.

4. Documents Required

Directors / Shareholders (Indian nationals)

• PAN card
• Aadhaar card / Voter ID / Driving licence (ID & address)
• Latest utility bill / bank statement (address proof)
• Passport-size photograph

Foreign nationals

• Passport (notarised / apostilled as required)
• Address proof (notarised / apostilled)

Registered office

• Rent agreement / ownership proof
• NOC from landlord (if rented)
• Utility bill (not older than 2 months)

5. Step-by-Step Registration Process (SPICe+)

1. Obtain DSC — Digital Signature Certificate for proposed directors.
2. Apply for DIN — Director Identification Number (can be allotted via SPICe+).
3. Name reservation — RUN service or SPICe+ Part A (ensure trademark clearance).
4. Draft MOA & AOA — Memorandum & Articles of Association describing objectives and rules.
5. File SPICe+ (INC-32 / integrated) — incorporation, DIN allotment, PAN & TAN, and optional registrations (GST, EPFO, ESIC).
6. Certificate of Incorporation — ROC issues COI with CIN; PAN/TAN allotted automatically.

6. Post-Incorporation Formalities

• First Board meeting within 30 days of incorporation
• Appointment of statutory auditor within 30 days
• Issue share certificates within 60 days
• Maintain statutory registers (members, directors, charges)
• File Commencement of Business (if applicable) and other required forms
• Apply for GST, PF, ESI, professional tax — as applicable

7. Annual Compliances

• Board meetings (as required) and Annual General Meeting
• Annual ROC filings — AOC-4 (financial statements), MGT-7 (annual return)
• Income Tax Return (company ITR) — filed annually
• Maintain books of accounts and statutory records

8. Taxation

• Corporate tax rates:
  • 25% for companies with turnover up to ₹400 crore (subject to conditions)
  • 30% for others
• Special rate: 15% for new manufacturing companies (Section 115BAB) where conditions apply
• Minimum Alternate Tax (MAT) may apply where relevant
• Dividend Distribution Tax (DDT) abolished — dividends taxed in shareholders’ hands

9. Comparison — Pvt Ltd vs Other Structures

10. Common Mistakes to Avoid

• Choosing a name that conflicts with existing companies or trademarks
• Poorly drafted MOA / AOA not reflecting business scope
• Delaying post-incorporation compliances (board meetings, auditor appointment)
• Not opening company bank account promptly
• Mingling personal and company finances

11. Conclusion

Incorporating a Private Limited Company provides credibility, fundraising capability and legal protection — making it ideal for entrepreneurs aiming to scale. Digital tools like SPICe+ have simplified incorporation, but professional guidance is still valuable to ensure compliance and smooth post-incorporation operations.

RegistrationMART offers end-to-end incorporation services — from name approval and SPICe+ filing to post-incorporation compliance and tax advisory.